Commission queries wholesale telco pricing

Australia's competition watchdog has released a discussion paper seeking input on pricing guidelines for accessing wholesale telecommunications services.

The Australian Competition and Consumer Commission (ACCC) is seeking input from the telecommunications industry to develop the pricing guidelines which would be used as a "reference point" to create a more open and transparent industry.

The ACCC is requesting submissions on how the model pricing should be determined to be introduced in early 2003.

Services under review include: Public Switched Telephone Network (PSTN), Unconditional Local Loop Services (ULLS) and Local Carriage Services (LCS).

ACCC chairman Allan Fels said while the indicative pricing would not be binding but it would speed up the ACCC's ability to resolve disputes, creating a more efficient and competitive market, if published guidelines existed.

Professor Fels also hoped the publication of industry pricing guidelines would encourage parties to reach commercial agreements lessening the need for arbitration.

"The ACCC sees indicative prices as being a reference point which will assist parties to resolve any differences encountered when negotiating the terms and conditions of access and will also encourage parties to give undertakings to the ACCC," Fels said.

Since 1999 the ACCC had used an economic cost model to calculate service charges but while reliable, the commission said the system did not produce the relevant information in a timely way.

The main alternative was a full model approach to estimate future rates for a specified period by using previous modelling work and applying adjustments to set indicative prices.

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